Hays climbs to £264 million but warns of job market standstill

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The Guildford-based firm said demand for permanent staff was falling while the once-buoyant temporary jobs market has ground to a halt.

Alistair Cox, who took over from Denis Waxman as chief executive in November, said recruitment for the City market and construction industry was particularly bad.

It came as Hays reported a 3% fall in profits in the UK and Ireland to £137.3 for the 12 months to the end of June after a 10% slump in the second half.

Profits for the year in the accountancy and finance business were down 3% on a 20% fall in recruitment while there was an 8% fall in profits in the construction and property sector.

As many as 1200 jobs are set to be axed at the London headquarters of investment bank Dresdner Kleinwort following its £7.3 billion takeover by Commerzbank.

Housebuilders, estate agents and property consultants have also slashed thousands of jobs in the downturn.

"Very clearly a number of our markets including the UK are getting more difficult," said Cox. "In the UK, the temporary market has leveled off and the market for temporary workers is flat.

Employers are being quite considered and circumspect about anything to do with recruitment. Demand for permanent placements is falling."

Despite problems in Britain, which accounts for just over half of business, Hays delivered a 25% jump in profits for the year to £264.4 million after fees rose 24% to £786.8 million. It proposed a dividend of 5.8p up from 5p last year.

"We have the advantage of being in 27 countries and multiple sectors so we are spread across a whole host of areas," said Cox.

"The international performance has been outstanding with 14 countries achieving organic growth in net fees of more than 40%."